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PRESENTATION ON THE ACTION PLAN OF THE COMPENSATION FUND

This presentation outlines the comprehensive action plan of the Compensation Fund to improve service delivery, financial management, and administration. It addresses key issues and progress in meeting objectives.

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PRESENTATION ON THE ACTION PLAN OF THE COMPENSATION FUND

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  1. PRESENTATION ON THE ACTION PLAN OF THE COMPENSATION FUND PRESENTATION PREPARED FOR THE PORTFOLIO COMMITTEE ON LABOUR 2016.04.20 1

  2. CONTENTS • BACKGROUND • ANALYSIS OF THE ENVIRONMENT • OBJECTIVES OF THE ACTION PLAN • PILLARS OF THE ACTION PLAN • INITIATIVES IN THE ACTION PLAN • PROGRESS REPORT ON ACTION PLAN • PROGRESS ON PROCESSING OF CLAIMS • CONCLUSION 2

  3. BACKGROUND • The Compensation Fund (the Fund) has been receiving negative spotlight from media and other key stakeholders due to its service delivery record. • In order to restore its reputation and improve the service delivery record, the Fund has developed an Action Plan which will serve as a blue print for the service delivery improvement initiatives • Action Plan was developed by management of the Fund in June 2015 and implementation started on 01 July 2015 • The Action Plan was submitted to the Standing Committee on Public Accounts as resolved during the appearance of the Fund at the committee in June 2015 • The Action Plan is not a replacement for the current Strategic Plan and Annual Performance Plan of the Fund but will enhance the pursuit of the objectives as outlined in these documents. 16/04/22 3

  4. ANALYSIS OF THE ENVIRONMENT Financial Management Issues • Poor quality of information used for financial reporting • Inability to produce accurate monthly financial statements • Inability to carry out some of the financial management functions on the financial system • Non compliance to Supply Chain Management Policies and regulations resulting in high number of financial misconduct cases • High number of AGSA audit findings that have not been dealt with over a number of years • Inadequate capacity in the Chief Directorate: Financial Management 16/04/22 4

  5. ANALYSIS OF THE ENVIRONMENT Administration Issues • Poor communication within the Fund • Oversight committees highly involved in operational management of the Fund. • Organised structures for management interaction are in existence but not fully functional • Consultants engaged with duplicated scope in some cases and no effective skills transfer • Inadequate ICT Environment thus contributing to poor system deployment • Poor record management processes 16/04/22 5

  6. ANALYSIS OF THE ENVIRONMENT Service Delivery Issues • Inadequate ICT infrastructure resulting in • volumes of unpaid medical claims (incl legal challenges) • Infrequent payment of benefits • Refusal by medical provider to assist our clients • Risk of overreliance on ICT Service provider for the claims systems (a licensee of the Fund) • Lack of integration of the systems of the Fund to allow for seamless reporting and monitoring of performance 16/04/22 6

  7. ANALYSIS OF THE ENVIRONMENT Service Delivery Issues (cont…) • Medical service providers who destabilise the Fund’s systems for own advantage • Unregulated/undefined involvement of third parties in the claims process • Claims data is still in three systems (eClaims , ICM and uMehluko) • LImited medical professionals for assessment of medical claims • Inadequate training on the systems of the Fund 16/04/22 7

  8. ANALYSIS OF THE ENVIRONMENT People Issues • Low staff morale • Unintended consequences of decentralisation • Relations between staff and management • Breakdown in relationship between organised labour and management (lack of trust) • Silo operations among the different units in the Fund • Lack of accountability (no consequences ) 16/04/22 8

  9. ANALYSIS OF THE ENVIRONMENT People Issues • Poor change management efforts for all transformation projects (including system deployment) • General unhappiness with salary levels in organisation • Poor management of personal development plans 16/04/22 9

  10. OBJECTIVES OF THE ACTION PLAN The main objectives of the Action Plan are to put in place basics that will assist in : • Improving the service delivery performance in the Fund • Increasing the efficiency of the Fund‘s overall administration, financial management and operations • Restoring the reputation of the Fund 16/04/22 10

  11. PILLARS OF THE ACTION PLAN 11

  12. PILLARS OF THE ACTION PLAN Financial Administration Customer Focus and Service Delivery Improvement Internal Business Process and Administration People Management Focus on addressing the root causes of the audit disclaimers and improving the financial management capacity in the Fund Focus on improving the customer and stakeholder experience in the Fund Focus on improving the administrative efficiencies of the Fund Focus on improving the service delivery environment of the Fund. 16/04/22 12

  13. INITIATIVES IN THE ACTION PLAN • The plan is broken down into short , medium and long term goals depending on The plan is broken down into short , medium and long term goals depending on resource requirements of an initiatives • The 17 activities/initiatives that are in progress were moved to medium term due high dependency on some of the projects currently taking place in the Fund. Short Term 31 March 2016 Long Term 30 April 2017 Medium Term 30 June 2016 Progress on Short Term Activities Achieved – 48 (74%) In-Progress – 17 (26%) 16/04/22 13

  14. INITIATIVES IN THE ACTION PLAN Financial Administration • Revision of the Employer Assessment Model • Loading and reduction of assessment tariffs • Implementing Employer Discount • Improving Debt Collection • Correcting the Interest and penalty functionality and prior year figures • Approval of Financial Policies • Clearance of suspense accounts on contributions • Finalising the Merit Rebates • Improving the bulk payment processes on uMehluko • Build capacity with the Financial Management unit • Clearing of long outstanding reconciliation items • Correction of all prior open vouchers • Automate Bank Reconciliation on Ability 16/04/22 14

  15. INITIATIVES IN THE ACTION PLAN Customer Focus and Service Delivery Improvement • Participate in the Department of Health contract for the supply of chronic medication • Engagements with Hospitals, Health Association and key stakeholders to improve relations • Develop and implement Return to Work programme • Development of the Rehabilitation and reintegration of injured employees • Establishment of a panel of experts for the Post Traumatic Stress Disorder (PTSD) • Restructuring of the query resolution process to improve the turnaround time for customer queries and complaints 16/04/22 15

  16. INITIATIVES IN THE ACTION PLAN Internal Business Processes • Restructure the employer registration and compliance functions to align core business • Eradicating claims backlogs at Operations • Improving functional knowledge of team through multi-skilling • Allocating project team, to process open items from the SAP system • Filling of medical posts at provincial offices • Performing independent quality assurance on uMehluko to ensure that it will meet the business requirements • Improving Hospital Case Management to introduce efficiency • Implementing the CCMA case management system for hearings and objection matters • Implementing the fraud prevention and detection measures • Develop and implement a business continuity programme 16/04/22 16

  17. INITIATIVES IN THE ACTION PLAN People Management • Skills Audit for staff performing CF functions at both national and provincial offices • Implementing change management on current projects • Developing a change management framework for the Fund • Adhere and Implementation of Performance Management policies • Enhancing training and development • Improving internal and external communication • Assess the impact of decentralisation on staff • Embark on project for the review of Organisational structure 16/04/22 17

  18. PROGRESS – Financial Administration Financial Administration 16/04/22 18

  19. PROGRESS – Financial Administration • Research was conducted on the correct accounting treatment of Fund’s levies and this resulted in the development of Revenue Management position paper that will be used for the development of accounting policies and business processes on Revenue Management. • Dimension Data has been appointed to perform all enhancements identified in the revenue enhancement pillar and they have already started with all projects. The Employer Discount functionality was the first deliverable and was launched in February 2016. As a result the Fund has now been able to identify R211 million discounts that were de to employers. These discounts are being paid out to employers. • Merit Rebates were gazetted on 31 August and the gazette was followed up by a Newspaper Advert. Rebates that were due to employers have now been processed and R53 million was claimed by employers while R10 million has been unclaimed and now transferred to Reserves. 16/04/22 19

  20. PROGRESS – Financial Administration • An interim ICT infrastructure solutions for the Fund’s claims management system have been implemented while a longer term solution is being sought. The Interim solution has yielded good results on the performance of the system • Capacity in financial management has been enhanced with the appointment sufficiently skilled personnel in the key areas within the financial management unit: Director(s): Financial Reporting, Financial Control and Income as well as an Acting Chief Financial Officer • All enhancements planned for uMehluko (the claims processing system) to improve processing and payments of benefits are in progress. Some functionality are in testing phase. To date the following enhancements have been delivered: • Duplicate Invoice Checks (See slide 33 for examples) • Payment Process for Legal Claims • Infrastructure upgrade (mini upgrade) • Listing Report • Pensions Application • Reports- Operational 16/04/22 20

  21. PROGRESS – Financial Administration Example of Duplicate Invoices detected and deleted - Compsol Example of Invoices paid– Compsol 16/04/22 21

  22. PROGRESS – Customer Focus and Service Delivery Improvement Customer Focus and Service Delivery Improvement 16/04/22 22

  23. PROGRESS – Customer Focus and Service Delivery Improvement • The Fund has decided to go on own tender instead of using Dept of Health contract. Business Case has been approved. A Request for Proposal (RFP) was published in March 2016. An appointment will be made by end of May 2016. • There has been significant progress made with the Hospital Groups in addressing the challenges and this has contributed to a substantial increase in medical benefits paid for the period up to March 2016. In excess of R5 billion has been paid for medical, compensation and pension benefits. • The Fund is interacting with various associations and registration bodies to develop a working relationships. Discussion already held with institutions like SAICA and SAMA. Discussion are on going on how we will collaborate on outreach programmes to their members. 16/04/22 23

  24. PROGRESS – Customer Focus and Service Delivery Improvement • A Post Traumatic Stress Disorder (PTSD) panel of experts has been appointed and the work of the committee has started. This will ease the problems associated with claims on PTSD particularly in the exempted employer space. • On-going educational campaigns are taking place on the different media platforms to educate clients on the processes and systems of the Fund. • The process is underway to develop a Return to Work and Rehabilitation Policy with the assistance of the German Social Accident Insurance Agency (DGUV). This process will be followed by a pilot phase. • A new client query resolution team and process has been put in place to deal quickly with clients enquiries and complaints. A multi disciplinary team for each province has been put together. 16/04/22 24

  25. PROGRESS – Internal Business Process/Administration Internal Business Processes/Administration 16/04/22 25

  26. PROGRESS – Internal Business Process/Administration • Sessional Nurses and Doctors appointed and their contracts are effective from 01 February 2016 to assist with adjudication of medical claims and preauthorisation's. There additional nurses and doctors who are in the process of being appointed to add to the current numbers. • Enhancements have been done on uMehluko which were released in the last quarter of the financial year but there remain a large number of enhancements outstanding. • We have started the process to fill the permanent medical doctor and medical case managers posts. Interview for the provinces were finalised in February 2016. Some of the medical practitioners have already commenced work. • Declaration of Interest Policy has been approved for implementation from April 2016, where all staff will be expeced to declare their financial and business interest. • BCM Policy has been approved by the DG and process is underway to finalise the strategy 16/04/22 26

  27. PROGRESS – People Management People Management 16/04/22 27

  28. PROGRESS – People Management • A Skills Audit On Staff at the Fund has been completed and the skills levels, gaps and required competencies have been identified. The Fund is in the process of developing implementation Plan for the corrective action. • Change Management project to assess the impact of previous interventions and develop a new framework for the Fund is underway. The project will be concluded at the end of April 2016. • Guidelines on transfer requests, wellness issues and Staff Complaints for the decentralised staff developed and communicated to all staff and being implemented. Employee Health and Wellness unit is assisting staff that are negatively affected by the consequences of decentralisation. 16/04/22 28

  29. PROGRESS – People Management • A report on how to deal with the issues emanating from the decentralisation process has been completed and recommended options are being considered. • The process to review the functional structure of the Fund has commenced with the view to organise the fund into three business units as a way to improve the speed with which we render the service. 16/04/22 29

  30. Progress on Claims Processing • The Fund has started to make a significant progress with regards to the processing of claims 16/04/22 30

  31. Medical Payments 16/04/22 31

  32. Compensation Benefits 16/04/22 32

  33. Pension Payments 16/04/22 33

  34. Examples of Medical Claims Deleted (Auto)- Compsol 16/04/22 34

  35. CONCLUSION • ICT remains one the biggest dependencies for the success of the turnaround interventions at the Fund. Delays in this area will contribute negatively to improved performance. • We have started a significant number of the identified projects and we will continue to monitor implementation to ensure that we meet the deadlines we’ve set for ourselves. 16/04/22 35

  36. Thank You… 16/04/22 36 36

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